CBS ordered CNET not to consider the Dish Network's Hopper with Sling, a recording device with ad-skipping technology, for the "Best in Show" award at the Consumer Electronic Show. / Jae C. Hong, AP

by Roger Yu, USA TODAY

by Roger Yu, USA TODAY

With the CBS programming blackout on Time Warner Cable systems in eight markets well into its fourth day, the cable company made a new proposal - and CBS rejected it as a "sham."

In a letter Monday from TWC CEO Glenn Britt to CBS CEO Leslie Moonves, Britt proposed to restore the stations if CBS agrees to "the new economics TWC reluctantly agreed to" during talks and keeps other terms from their expired deal for rights to carry CBS station signals.

Britt also implied that TWC was willing to forgo its insistence on digital rights that would allow the cable company to distribute CBS shows via streaming to subscribers.

"Although those terms are not ideal to CBS or TWC, and would leave TWC and our customers without the digital rights that CBS has provided to others, since both parties have lived under those terms productively for many years, we believe we should continue to live with them in the interest of restoring CBS," Britt wrote.

In response, the CBS statement said: "Today's so-called proposal is a sham, a public relations vehicle designed to distract from the fact that Time Warner Cable is not negotiating in good faith. Anyone familiar with the entertainment business knows that the economics and structure of the cable industry doesn't work that way and isn't likely to for quite some time. In short, this was an empty gesture from a company that is expert at them."

Britt's letter offered an alternative for CBS if it refused his offer: TWC could offer the CBS stations to its subscribers on an a la carte basis at a price set by CBS, which would keep all the fees. "This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming," Britt wrote.

TWC then could pass the CBS fee to subscribers as a separate line item on their cable bill, said Justin Nielson, an analyst at research firm SNL Kagan. "They'd be pointing out to consumers the fact that they're paying for specific programming from CBS. As they do with HBO, for example."

The exchange was the latest development in a battle about fees and terms between the cable giant and the TV network.

TWC, the second largest U.S. cable provider, dropped CBS Friday in eight markets nationwide - including New York, Los Angeles and Dallas - after the companies failed to agree on a new retransmission contract by their 5 p.m. deadline. Such contracts - renegotiated roughly every three years - set how much money cable and satellite TV providers pay station owners for the right to carry their signals.

As a result of the dispute, the cable networks owned by CBS - Showtime, TMC, FLIX and Smithsonian - also went dark in the eight markets.

The CBS-TWC contract expired at the end of June but was extended until last week as talks continued. The contract applies only to the stations owned by CBS, not to CBS-affiliated stations owned by other broadcasters.

In a retaliatory move, CBS cut off access for TWC customers - including those who only subscribe to broadband Internet - to recently aired episodes available on CBS.com.

In the Monday letter, Britt called the move "abhorrent" and called for CBS to reopen the online access. "Regardless of the issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others," he wrote.